Pelc v. Hartford Fire Ins. Co.

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[Cite as Pelc v. Hartford Fire Ins. Co., 2004-Ohio-3438.] COURT OF APPEALS STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT GLEN PELC Plaintiff-Appellee vs. THE HARTFORD FIRE INSURANCE COMPANY, ET AL. Defendants-Appellants : : : : : : : : : : JUDGES: Hon. W. Scott Gwin, P.J. Hon. Sheila G. Farmer, J. Hon. Julie A. Edwards, J. Case No. 2004CA00017 OPINION CHARACTER OF PROCEEDING: Appeal from the Court of Common Pleas, Case No. 2001CV02568 JUDGMENT: Reversed DATE OF JUDGMENT ENTRY: June 28, 2004 APPEARANCES: For Plaintiff-Appellee For The Hartford Fire Insurance Company SAMUEL J. FERRUCCIO, JR. 400 United Bank Plaza 20 Market Avenue, S. Canton, OH 44702 ANN MARIE O'BRIEN One Cascade Plaza Suite 800 Akron, OH 44308 CHRIS T. NOLAN Stark County, App. No. 2004CA00017 300 Courtyard Square 80 South Summit Street Akron, OH 44308-1736 2 Stark County, App. No. 2004CA00017 3 Farmer, J. {¶1} On March 4, 1998, appellee, Glen Pelc, was injured in a motor vehicle accident caused by the negligence of another. At the time of the accident, appellee was employed by Advance MicroFinish, Inc., insured under a commercial automobile, general liability and umbrella policy issued by appellant, The Hartford Fire Insurance Company. Appellee was not in the course and scope of his employment when the accident occurred. {¶2} On September 18, 2001, appellee filed a complaint for declaratory judgment seeking coverage under the Hartford policies. All parties filed motions for summary judgment. By judgment entry filed April 15, 2002, the trial court found in favor of appellee on the automobile and umbrella policies, and in favor of Hartford on the general liability policy. On appeal, this court affirmed the trial court's decision that appellee was an insured under the automobile and umbrella policies, but remanded the case to the trial court for a determination in light of Ferrando v. Auto-Owner Mut. Ins. Co., 98 Ohio St.3d 186, 2002-Ohio-7217. See, Pelc v. The Hartford Fire Insurance Company, Stark App. No. 2002CA00142, 2003-Ohio-764. {¶3} During the pendency of this case in the trial court, the Supreme Court of Ohio decided the case of Westfield Insurance Co. v. Galatis, 100 Ohio St.3d 216, 2003Ohio-5849. On December 9, 2003, Hartford filed a motion for summary judgment in light of this decision. By judgment entry filed January 2, 2004, the trial court denied the motion, finding Galatis did not apply "under the unique facts of this particular case." {¶4} Hartford filed an appeal and this matter is now before this court for consideration. Assignments of error are as follows: Stark County, App. No. 2004CA00017 4 I {¶5} "THE TRIAL COURT ERRED IN DENYING SUMMARY JUDGMENT TO APPELLANT, THE HARTFORD FIRE INS. CO. ON THE APPLICABILITY OF WESTFIELD V. GALATIS, WHERE IT IS UNDISPUTED THAT APPELLEE WAS NOT IN THE COURSE AND SCOPE OF HIS EMPLOYMENT AT THE TIME OF THE ACCIDENT." II {¶6} "THE TRIAL COURT ERRED IN FINDING THAT WESTFIELD V. GALATIS WAS NOT APPLICABLE AND DETERMINING THAT COVERAGE EXISTED FOR APPELLEE WHERE IT IS UNDISPUTED THAT APPELLEE WAS NOT IN THE COURSE AND SCOPE OF HIS EMPLOYMENT AT THE TIME OF HIS ACCIDENT." III {¶7} "THE TRIAL COURT ERRED AND DENIED APPELLANT THE EQUAL PROTECTION OF THE LAW WHEN IT FAILED TO APPLY THE WESTFIELD V. GALATIS DECISION AND GRANT SUMMARY JUDGMENT TO HARTFORD." I, II {¶8} Hartford claims the trial court erred in failing to apply the Galatis decision to the case sub judice. We agree. {¶9} The issue in this case is whether the Galatis decision should apply or whether the law of the case doctrine should apply. Based upon the well reasoned opinion by the Honorable John W. Wise of this court in Gooding v. National Fire Insurance Company of Hartford, Stark App. No. 2003CA00199, 2004-Ohio-693, ¶20-28, Stark County, App. No. 2004CA00017 5 we find the Galatis opinion should apply. Therefore, the trial court erred in failing to apply the Galatis decision in this case. {¶10} Assignments of Error I and II are granted. Assignment of Error III is moot. {¶11} The judgment of the Court of Common Pleas of Stark County, Ohio is hereby reversed. By Farmer, J. Edwards, J. concurs. Gwin, P.J. dissents. _____________________________ _____________________________ _____________________________ JUDGES SGF/db 0610 Stark County, App. No. 2004CA00017 6 Gwin, J., dissenting I & II {¶12} I must dissent from the decision reached by the majority. Both of these assignments of error address the issue of whether the Galatis case should be applied here or whether the law of the case doctrine applies preventing application of Galatis to this case. {¶13} Law of the case doctrine holds that once a reviewing court has reversed and remanded a cause for further action in the trial court, and the Ohio Supreme Court, does not review it, the pronouncement of law by the intermediate court becomes law of the case and must be followed by the lower court in subsequent proceedings, see Pavlides v. Niles Gun Show, Inc. (1996), 112 Ohio App. 3d 609, 679, N.E. 2d 729. The law of the case doctrine has evolved because it is necessary not only for results to be consistent and litigation be finally terminated, but also to preserve the integrity of the judiciary as set forth in the Ohio Constitution, Id. A trial court has no discretion to disregard the mandate of the appeals court in a prior appeal in the same case, absent extraordinary circumstances, such as an intervening decision by the Ohio Supreme Court, Id., citing Nolan v. Nolan (1984), 11 Ohio St. 1, 462 N.E. 2d 410. An intervening Supreme Court decision is one which states a rule of law in conflict with the earlier mandate, State ex rel. Crandall, Pheils & Wisniewski v. DeCessna (1995), 73 Ohio St. 3d 180, 1995-Ohio-98, 652 N.E. 2d 742. {¶14} Law of the case doctrine is thus applicable to subsequent proceedings in the reviewing court, except an appellate court may chose to re-examine the law of the Stark County, App. No. 2004CA00017 7 case it has itself previously created if it is the only means to avoid injustice, Pavlides, supra. {¶15} Appellant urges the decision of the Galatis case is an extraordinary circumstance which does state a rule of law in conflict with, and overrules Scott-Pontzer and its progeny. Appellant also urges this court should re-examine the law of the case because it is the only means to avoid injustice. {¶16} While appellant is correct that a decision of the court of supreme jurisdiction overruling a former decision is retrospective in its operation, the general exception to this rule is where a contractual right has arisen or vested rights have been acquired under the prior decision. In Lewis v. Symmes (1900), 61 Ohio St. 471, 56 N.E. 194, the Ohio Supreme Court noted: the rule that retrospective operation should not be given to a change in judicial opinions respecting the constitutional validity of legislative enactments can be invoked only to avoid the impairment of the obligation of contracts which have been entered into pursuant to a statutory provision, syllabus by the court. The court explained the reason is to secure the full operation of the constitutional prohibition of laws impairing contracts. {¶17} In Peerless Electric Company v. Bowers (1955), 164 Ohio St. 209, 129 N.E. 2d 467, the Ohio Supreme Court expanded the rule first set forth in Lewis to mandate the retrospective application of decision overruling another decision, not just a statute. Recognizing the same exception to the rule as the Lewis court, the Peerless court stated courts should not respectively apply decisions where contract rights have arisen or vested rights have been acquired under the previous decision. Stark County, App. No. 2004CA00017 8 {¶18} The parties to the contract at issue entered into the contract relying on the uninsured/underinsured statutes. {¶19} The recent case of Reinhart v. The Ohio Bureau of Workers Compensation, Court of Claims Number 2002-08513, 2004-Ohio-312, is instructive. In Reinhart, an injured worker sought to recover funds he paid to the Bureau of Workers Compensation pursuant to its subrogation rights in his personal injury settlement. After the claimant paid the funds over to the Bureau of Workers Compensation, the statute giving the Bureau subrogation rights was struck down as unconstitutional. The court of claims found the Bureau of Workers Compensation s right to subrogation had vested before the statute was declared unconstitutional, and thus, the claimant was not entitled to be reimbursed. The court of claims held the Supreme Court s decision striking down the statute must not be applied retroactively so as to nullify contractual rights and obligations, Id. citations deleted. {¶20} In the case before us, this court previously affirmed the trial court s determination appellee is an insured under appellant s policy on February 20, 2003. The delay in the trial court s Ferrando hearing was occasioned by another party s appeal, in which appellant had no interest. {¶21} I would find this matter deals with the enforcement of vested contractual rights, and thus, the Supreme Court mandate is to not apply Galatis retrospectively. At this particular point in time, we have received no mandate from the Ohio Supreme Court to apply Galatis to cases which have already proceeded through the appellate process, and which were resolved long before the Galatis opinion was announced. The only suggestion Galatis should apply is in Fish v. Ohio Casualty Insurance Company, 101 Stark County, App. No. 2004CA00017 9 Ohio St. 3d 1210, 2004-Ohio-224, 802 N.E. 2d 149, wherein the Ohio Supreme Court declined to review the Fish case. Justice Lundberg-Stratton concurred in the decision, and Justice O Donnell joined, urging that Galatis should apply to all pending cases where a Scott-Pontzer claim has been raised. The concurrence urges Galatis represents an intervening change in law sufficient to re-examine a point of law, but it is signed by only two justices. In my view, this is insufficient to overturn such a fundamental principle as the doctrine of law of the case, and is certainly insufficient to impair the Ohio Constitutional guarantee of freedom of contract. {¶22} I would overrule the first and second assignments of error. III {¶23} In its third assignment of error, appellant argues where the Ohio Supreme Court has issued an intervening decision and the trial court refuses to apply the decision, this constitutes a denial of equal protection under the law. {¶24} The trial court s decision here does not deny appellant s right to equal protection under the law. The trial court s decision does not do violence to the contract between appellant and its insured. In fact, the trial court s decision is based upon the Ohio Constitution s protection against laws which impair the obligations of contracts. {¶25} I would overrule the third assignment of error. _____________________________ JUDGE W. SCOTT GWIN [Cite as Pelc v. Hartford Fire Ins. Co., 2004-Ohio-3438.] IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT GLEN PELC Plaintiff-Appellee -vsTHE HARTFORD FIRE INSURANCE COMPANY, ET AL. Defendants-Appellants : : : : : : : : : : JUDGMENT ENTRY CASE NO. 2004CA00017 For the reasons stated in the Memorandum-Opinion on file, the judgment of the Court of Common Pleas of Stark County, Ohio is reversed. _____________________________ _____________________________ _____________________________ JUDGES

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